Jamie Page
|Head of Protection Distribution
Our latest research captured the main reasons for consumers not taking out insurance. In this article, I take a closer look at the top protection objections and how you can overcome these.
“I can’t afford it”
53% of employed workers and 58% of self-employed workers told us affordability was a barrier to applying for, or purchasing, insurance.1
Not a huge surprise to hear this was the top barrier when you consider the current climate. A day doesn’t go by without hearing about the cost-of-living crisis and how different households are impacted. But this also indicates there’s never been a more important time to safeguard your finances. If your clients are concerned about their spending habits and having to cut back now, what would they do if they had an accident or became unwell resulting in being off work and having no means of regular income?
Protection can be more affordable than your clients might think. There are a lot of misconceptions out there about affordability. Did you know the average cost of an income protection policy with a two-year claim period in 2021 was just £24 per month?2
Then there’s product flexibility. By making the most of the different premium options available with income protection products and considering both short and long-term claim periods, you can put together a solution that suits your client’s budget and needs.
“I don’t see the need”
18% of workers said they don’t see the need in applying for or purchasing insurance.1
Your clients may think they don’t need protection. But we see the claims stats every year and we know this is far from the truth. A record £6.8 billion was paid out in individual and group life insurance, income protection, and critical illness claims in 2021. This equated to £18.6 million a day.3 And if you look at The Exeter’s claims figures, we paid 93% of income protection claims resulting in a total of £10.5 million being paid out.4
The main reasons for claiming with The Exeter in 2021 were musculoskeletal conditions, illnesses related to Covid-19, hip/knee conditions, and mental health. These accounted for almost 75 per cent of claims.4 Most people may be surprised at these reasons as they’re not rare or unusual illnesses or injuries. They’re issues and problems people discuss on a monthly, weekly, or daily basis. It just takes one of these problems to escalate and become so bad they're unable to work.
Our income risk calculator is a useful tool to help your client visualise the risk they face. It also shows how income protection can play an important part in being able to protect their savings and maintain the lifestyle they’re used to.
“I’ve got savings”
6% of workers told us they didn’t have insurance as they rely on savings.1
We know 39% of working adults save less than £100 in a typical month, with one in seven (14%) saving nothing.1 And nearly a quarter of the population are dipping into their savings to cover their monthly living costs. People are cutting back, saving less, and even having to raid their savings to cover essentials. Yet, there is a reliance on these same savings if there were a loss of income.
We want to support you when it comes to your client conversations, overcoming protection objections, and helping you achieve good customer outcomes. Our income risk calculator can do all this, and more. The report also helps highlight the accumulated debt your clients could be burdened with if they were unable to work, and the solutions available to your client.
We also have an on-demand CPD webinar that tackles more of the common objections raised in our research.
Find out more by visiting our website or booking a briefing with one of our experts.
Sources:
1 – The Exeter, Challenging times: The health and financial fears of UK workers
2 - Swiss Re, Term & Health Watch 2022
3 - Association of British Insurers (ABI) and Group Risk Development (GRiD), Claims figures 2021
4 – The Exeter, Income protection claims statistics 2021